ConAgra Acquisition Spree Continues - Analyst Blog
May 23 2012 - 1:15PM
Zacks
ConAgra Foods Inc. (CAG) has been assiduously
expanding its store-brand food business portfolio over time despite
facing ongoing difficult macro-economic situations. Acquisition of
a number of private labels paved the way for such expansion; the
latest on its list being Kangaroo Brands, a well-known manufacturer
of pita bread and frozen sandwiches.
Post acquisition, the manufacturing unit of Kangaroo’s pita chip
business based in Milwaukee, WI. will be integrated with ConAgra’s
food business. However, the financial terms and conditions of the
agreement were not disclosed.
The recent acquisition supports the company’s strategy of
low-priced product innovation and value-added services. It will add
depth and dynamism to ConAgra’s existing product lines.
The previous acquisitions by ConAgra such as, National Pretzel
Co., Del Monte Canada and Odom's Tennessee Pride are expected to
have a positive impact on the company’s growth prospects. Earlier,
in the third quarter of fiscal 2012, the company witnessed about
7.4% augmentation in net sales from the prior-year quarter.
ConAgra Foods Inc. established itself as one of North America’s
leading food makers operating in Consumer Foods and Commercial
Foods segments. The Company’s brand acquisition strategy, sales
execution, marketing and innovation capabilities have over time
given a tough competition to its peers like Kraft Foods
Inc. (KFT), Nestl (NSRGY) and H.
J. Heinz Company (HNZ).
The current Zacks Consensus EPS Estimate for the fiscal year
2012 and 2013 are $0.50 and $1.77, signifying annual growth of
5.61% and 8.50%, respectively. The company currently carries a
Zacks #3 Rank which denotes a short-term (1-3 months) ‘Hold’
recommendation for the stock. We currently maintain a Neutral
recommendation on the stock.
CONAGRA FOODS (CAG): Free Stock Analysis Report
HEINZ (HJ) CO (HNZ): Free Stock Analysis Report
KRAFT FOODS INC (KFT): Free Stock Analysis Report
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